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Turkey Reconsiders Blocking Stellantis-Tofas Deal Amid New Discussions

By  |  December 4, 2024

Turkish authorities are revisiting their decision to block Stellantis NV’s proposed sale of its local distribution business to Tofas, following recent talks between government officials and company representatives, Bloomberg reports. This development marks a potential reversal of an earlier ruling that halted a deal valued at €400 million ($420 million) due to regulatory concerns.

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    According to individuals familiar with the matter, who spoke on condition of anonymity due to the sensitivity of the discussions, the Turkish Competition Authority is reassessing the antitrust implications of the agreement. The deal, which was originally rejected, would have granted Tofas exclusive rights to import and distribute Stellantis brands like Peugeot, Citroen, Opel, and DS Automobiles in Turkey.

    Market Reaction and Statements

    Following news of the discussions, Tofas saw its shares rise by as much as 10% to 216.9 liras in Istanbul, the company’s largest single-day gain in nearly three years. Meanwhile, Koc Holding AS, which jointly owns Tofas with Stellantis, experienced a 4% increase in its share price.

    Tofas responded to inquiries with a statement describing the antitrust ruling as an “interim” step, adding that updates on the approval process would be shared with the public. The Turkish Competition Board declined to comment on the ongoing deliberations, and Stellantis was not immediately available for comment, per Bloomberg.

    Strategic Importance

    The potential agreement aligns with Stellantis’s broader strategy to expand its presence in emerging markets like Turkey, which it views as a critical growth area alongside its core operations in North America and Europe. Under the leadership of former CEO Carlos Tavares, who stepped down on Sunday, Stellantis emphasized its focus on such markets as a “third engine” for profitability. This focus is expected to persist as the company transitions to new leadership.

    The deal with Tofas, announced last year, included plans to extend production of the Tipo/Egea passenger car through 2025 and to grant Tofas exclusive manufacturing and distribution rights for Stellantis’s K0 light commercial vehicle, with production slated to start in 2025.

    Regulatory Concerns

    Regulators initially blocked the deal, citing insufficient measures by Stellantis and Tofas to address antitrust issues. It remains unclear whether additional guarantees or changes have been proposed during the recent discussions.

    Tofas, headquartered in Bursa province, is a key player in Turkey’s automotive industry, producing sedans and light commercial vehicles. Its partnership with Stellantis through Koc Holding underscores the importance of the Turkish market to both companies.

    Source: Bloomberg